There are four key elements in a good performance and appraisal system:
You need to set objectives and have to decide what you want from employees and agree to these objectives with them. If it is appropriate, you should set timescales for achieving them.
Then you have to manage performance and performance levels, while giving your employees the tools, resources and training they need to perform well. If deem appropriate, you should set timescales for achieving objectives.
Then you need to carry out the appraisal while monitoring and assessing your employees' performance, discuss those assessments with them and agree on future objectives.
Next you need to provide rewards/remedies, then consider pay awards and/or promotion based on the appraisal then decide how to tackle a poor performance. However, there can be dangers as well as benefits of linking rewards to performance.
Performance appraisal, also known as employee appraisal, is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost and time). Performance appraisal is a part of career development.
Performance appraisals are regular reviews of employee performance within organizations; generally, the aims of a performance appraisal are to give feedback on performance to employees. You need to Identify employee training needs and document the criteria used to allocate organizational rewards.
Form a basis for personnel decisions: salary increases, promotions, disciplinary actions.
You need to provide the opportunity for organizational diagnosis and development while facilitating communication between the employee and the administrator.
You need to validate the selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.
A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates and customers while also performing a self assessment. This is known as 360° appraisal.
The most popular methods that are being used as performance appraisal process are:
Management by objectives
360 degree appraisal
Behavioural Observation Scale
Behaviourally Anchored Rating Scale
Trait based systems, which rely on factors such as integrity and conscientiousness, are also commonly used by businesses. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are two-fold:
1). Because trait based systems are by definition based on personality traits, they make it difficult for a manager to provide feedback that can cause positive change in employee performance. This is caused by the fact that personality dimensions are for the most part static, and while an employee can change a specific behaviour they cannot change their personality.
For example, a person who lacks integrity may stop lying to a manager because they have been caught, but they still have low integrity and are likely to lie again when the threat of being caught is gone.
Trait based systems, because they are vague, are more easily influenced by office politics, causing them to be less reliable as a source of information on an employee's true performance. The vagueness of these instruments allows managers to fill them out based on who they want to/feel should get a raise, rather than basing scores on specific behaviours employees should/should not be engaging in.
These systems are also more likely to leave a company open to discrimination claims because a manager can make biased decisions without